While flats are good value for money and often close to many services, you need to check carefully what you are buying into. When buying a flat, you are buying into a community with a joint responsibility for common repairs and management. Good property management is more important than good decorative order when it comes to buying a flat.
Choosing a good flat
The best flat to buy will be one which has:
- an active owners’ association, giving leadership to maintaining the building
- good property management arrangements
- a programme of works underway or recently completed
- a maintenance plan
- a building reserve fund
You are unlikely to find a flat that meets all these requirements which is of the right size and in the right place, so check carefully what you are taking on.
Finances
In calculating what you can afford to pay on a monthly basis for your new flat, you need to include:
- the mortgage
- council tax
- fuel bills
- saving for the annual cost of repairs or contribution to a building reserve/sinking fund
- factors bills
- building insurance (whether by a common policy or an individual policy)
The Home Report
The Home Report (also known as the Single Survey) contains important information about the flat. Review the whole Home Report and look beyond just the property valuation.
- The Home Report
- you should aim to include the cost of any Category 3 Repairs in the true purchase price as these will need to be dealt with urgently
- you will also need to be able to find the cost of any Category 2 Repairs in the near future
- Category 1 repairs are minor
- check for any mention of alterations and ask to see the necessary consents (if applicable)
- The Property Questionnaire
- are there proper arrangements for managing the buildings? (check questions 11, 12, and 16) – it should be kept in mind that it is the seller that completes the Property Questionnaire and the accuracy is not checked
- The Energy Performance Certificate
- has anything been done to make your fuel bills lower?
Remember that most Home Reports are not an in-depth building survey and there are limitations to the level of digging done by the surveyor. If in doubt, consider instructing a thorough building survey to check the condition of the main structural elements of the building (i.e. roof, external walls, etc.).
More information about the Home Report from Scottish Government
Other checks
- try and find out about your potential co-owners –Â are they good at co-operating with repairs?
- can the property factor give you any additional information about the building? – your solicitor will ask for a standard list of information from the factor but this might not give you the full picture
- get estimates for any repairs observed in the Home Report –Â if it looks like you will struggle to get common repairs sorted, consider whether you really want to pursue this purchase
- in some cases, your mortgage provider may withhold some money from your mortgage until necessary repairs are completed
- if it’s just the seller who has held up repairs, this may not be a problem, however, if it’s other owners, be prepared to have to enforce repairs
- listen carefully to what your legal adviser tells you about any property conditions (burdens and servitudes), parking restrictions, use conditions, etc. and, importantly, your share of the cost
- your solicitor should also make you aware if there is a Notice of Potential Liability registered against the flat, which could make the buyer responsible for past factoring debts – in most instances, these are paid for and discharged by the seller but there is no guarantee
- if you aren’t specifically told about these things, ask – it’s what conveyancers are paid for
Am I responsible for recent common repairs?
If common repairs are underway, even if they have only just been agreed to, the selling owner will be responsible for paying their share of these. The liability on the selling owner arises at the point that the common repair is instructed.
Their co-owners may decide to serve a Notice of Potential Liability to ensure this happens or the factor will insist on the seller’s solicitor retaining some of the sale price to pay off the factoring costs after completion. If a Notice of Potential Liability is registered, the Notice must be served 14 days before a new owner takes over the property to be effective.
If a common repair is being considered but has not yet been instructed (for example, the factor is currently obtaining quotes for the work), these will be the responsibility of the purchaser, should the repairs go ahead. This is because the purchaser will have had a chance to vote on these works (unless within the factor’s delegate limit of authority).
Make sure your conveyancer deals with any Notice of Potential Liability during the purchase process.
What if there is a repayment or charging order on the property?
Repayment or charging orders can be registered by the local authority to recover sums due to the council in relation to common repairs. Your solicitor should make sure the selling owner pays these off from the sale of the property.
After the purchase
Once you have completed the purchase, let the property factor (if there is one) know. You should be sent a Written Statement of Service within four weeks from the property factor which will set out the information you should know about the factor’s role in the common maintenance of the tenement.
If there is no property factor, find out about what happens with common repairs from other owners.
